Crude oil hits a four-week high as China stays strong

September 13, 2010 by Daniels Trading

The price of crude oil futures jumped on Monday, as China posted double-digit growth in manufacturing activity. On the IntercontinentalExchange, West Texas Intermediate light, sweet crude oil futures for December delivery – an energy industry benchmark for the U.S. sector – rose 0.8 percent to $78.89 per barrel, after earlier surging about $79.40 per barrel.

Brent crude oil futures gained 1.225 percent to $79.13 per barrel, possibly reflecting higher growth in European economies and abroad, since the Brent crude futures contract is less U.S.-focused than the WTI.

Indeed, China saw its industrial production rise nearly 14 percent in August from a year before.

The U.S. has its own supply issues with oil; Enbridge Energy Partners still doesn't know when it will be able to restart its Line 6A oil pipeline, which runs through the Midwest supplying Canadian crude oil to refineries in America's heartland.

The pipeline was shut several days ago when it began leaking in Illinois. Earlier in the year, another pipeline on the same Enbridge system leaked hundreds of thousands of barrels of crude into a Michigan waterway.

"The Chinese economic data today increases the prospect for demand growth," Tom Bentz, a broker with BNP Paribas Commodity Futures in New York, told Bloomberg. "The Enbridge pipeline is still shut, which is keeping the front end of the market firm."

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This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.